Cyfrowy Polsat: Awaiting the new strategy… (downgraded to HOLD)
We have downgraded our rating on Cyfrowy Polsat (CPS) to HOLD, from Buy, and increased our price target (PT) to PLN 35.0/share (from PLN 30.6/share), implying 3% upside potential from the current share price. We are HOLDers of CPS, considering its uninspiring valuation (at 2022-23E EV/EBITDAs of 7.9-7.7x, on our estimates, 53-54% premiums vs. its peers, vs. its two-year average premium of 29%) and the upcoming strategy update. We see a risk that the latter might not be welcomed by the market, considering that it might mean a major business diversification: we believe that CPS might enter the energy business, including renewables or even nuclear energy. On the other hand, we appreciate CPS’ FCF and DPS generation potential: we expect the adjusted FCF to increase from PLN 1.5bn in 2021E to PLN 1.9bn in 2023E and a total shareholder return of c.5% in 2022-23E. Our forecasts, however, do not include the entry into any new business areas, which might happen shortly.
WOOD & Company is the leading investment bank in Emerging Europe. Founded in 1991 and head-quartered in Prague, our footprint spans the region and touches investors around the globe.
A pioneer in Emerging Europe, WOOD executed many of the first CEE equity trades and landmark investment banking transactions. Our electronic trading platform was the first in the region, and remains the best. We are continually expanding our relevance and reach in these ever-evolving markets.
Our equity market share reflects our stature: 7% in Warsaw, 20% in Bucharest, 16% in Hungary, 40% in Prague and 5% in Vienna. Our distribution is unparalleled, with the largest salesforce in the region, servicing a uniquely diverse investor base.
We couple local expertise with a truly international perspective. With offices on the ground in the region, and in key financial hubs such as London and Milano, we are never far from our clients and we remain at the forefront of what’s afoot in the CEE emerging and frontier landscape.
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